SUMMER TRAINING REPORTON

“IDENTIFICATION AND POTENTAIL OF ALTERNATE CHANNEL PARTNERS FOR

CEMENT SALES”

CONDUCTED AT ULTRA TECH CEMENT PATIALA

SUBMITTED TO: SUBMITTED BY: Mr. ASHUTOSH MODI MOHIT KWATRA M.B.A 3rd (Sem)

GYAN JYOTI INSTITUTE OF MANAGEMENT AND TECHNOLOGY

ACKNOWLEDGEMENT

1

Perseverance, Inspiration and Motivation have always played a key role in the

success of any venture, so hereby it’s my pleasure to record thanks & gratitude to

the persons involved.

First I thank Mr. Lalit Mohan Dwivedi, Ultra Tech cement for his continuous

support, stimulating suggestions and helping me all the time during my project.

A special thanks goes to Mr.Surinder Bhatia Ultra Tech cement. He was already

ready to listen & give advice.

I am also greatly indebted to my mentor Mr. Ashutosh Modi who was there to

listen me & help me out if I ever had any problem . He has always been courteous

even consented over telephone. At last, thanks to my family members for being

supportive

Mohit Kwatra

PREFACE

2

Indian economy is facing a boom in the real estate. This is directly related with the

cement sector. Ultra Tech cement being one of the top three players in the Indian

market and the most exported Indian Cement is an important part of the sector.

During my project, I carried out a research for Ultra Tech cement and tried to find

out most of the dealers trading in construction industries(other than cement) and few

from other than construction industries, to find out potential in them to switch over

to cement sales with an ultimate aim to increase sales of Ultra Tech cement.

The report also gives a detailed idea about the Indian cement industry and the key

players.

3

DECLARATION

I do hereby declare that this project entitled “Identification and potential of

alternate channel partners for cement sales” in Patiala is my own and original

work. This is for fulfilling the requirement of project report. It has never been

submitted nor been published else where.

Date:

Place: Patiala

4

I N D E X

1 CEMENT AND ITS TYPES 6

2 INIAN CEMENT INDUSTRY OVERVIEW 11 CEMENT DEMAND BREAK UP 12 EXPORT OF CEMENT 13 MAJOR PLAYERS 15

3 INTRODUCTION ADITYA BIRLA GROUP ABG PROFILE 20 VISION MISSION AND VALUES 22 MAJOR COMPANIES OF THE GROUP 23 MAIN BRANDS OF THE GROUP 26

4 INTRODUCTION ULTRA TECH CEMENT PRODUCTION UNITS 30 ADVANTAGE 31 APPLICATIONS 33 EXPORTS 34

5 PROJECT WORK AIM OF THE PROJECT 36 OBJECTIVES OF THE STUDY 37 RESEARCH DESIGN 38 DATA ANALYSIS 41

6 CONCLUSION 44

7 LIMITATION 45

8 SUGGESTIONS 46

9 ANNEXURE (QUESTIONNAIRE) 47

10 BIBLIOGRAPHY 50

5

WHAT IS CEMENT?

Cement is a binder which sets and hardens independently, and can bind other

materials together. The word "cement" traces to the Romans, who used the term

"opus caementicium" to describe masonry which resembled concrete and was made

from crushed rock with burnt lime as binder. Cement is an essential component of

infrastructure development and most important input of construction industry,

particularly in the government’s infrastructure and housing programs, which are

necessary for the country’s socio-economic growth and development. Cement is a

mixture of limestone, Clay, Silica and Gypsum. It is a fine powder which when

mixed with water sets to a hard mass as a result of hydration of the constituent

compounds. It is the most commonly used construction material. Cement is

manufactured by burning a mixture of limestone and Clay at high temperatures in a

kiln, and then finely grinding the resulting clinker along with Gypsum.

Cement ranks second in volume among the industrial products manufactured in the

world. And it is the most widely used man-made product and second only to water

as world’s most heavily consumed substance. Cement is poly-phased inorganic

compound of complex nature formed by burning of calcareous and argillaceous raw

materials as a binding material. Cement is used as a binding material in various

types of civil constructions. Earlier, clay or lime was used for binding materials

together.

PROPERTIES OF CEMENT ARE:6

Low cost, high performance

Binder with almost any hard material

Building block

Gain strength progressively with ageing

Substitutes with steel, polyester, epoxy-resin, plasticizers

With advancement in manufacturing technology, today cement is a completely

technical product. Various types of grades of cement are being manufactured to

satisfy different needs of the construction industry. However, cement is still

considered as a non-technical product and used in a traditional and often unscientific

manner. Compressive strength is the important known parameter for approving the

quality of cement. Strength of cement is also affected by water-cement ratio, grading

of aggregates, methods of preparation, methods of compaction, curing conditions

and atmospheric conditions.

DIFFERENT TYPES OF CEMENT7

There are different varieties of cement based on different compositions according to

specific end uses, namely Ordinary Portland Cement, Portland Pozolona Cement,

Portland Blast Furnace Slag Cement, White Cement and Specialized Cement. The

basic difference lies in the percentage of clinker used.

1. Ordinary Portland Cement (OPC):

OPC, popularly known as grey cement, has 95% clinker and 5% of Gypsum and

other materials. It accounts for 70% of the total consumption. White cement is a

variation of OPC and is used for decorative purposes like rendering of walls,

flooring etc. It contains a very low proportion of iron oxide. Ordinary Portland

cement is the most commonly used cement for a wide range of applications. These

applications cover dry-lean mixes, general-purpose ready-mixes, and even high

strength pre-cast and pre-stressed concrete.

2. Portland Pozolona Cement (PPC):

Portland pozzolana cement is Ordinary Portland Cement blended with pozzolanic

materials (power-station fly ash, burnt clays, ash from burnt plant material or

Siliceous earths), either together or separately. Portland clinker is ground with

Gypsum and Pozzolanic materials which, though they do not have cementing

properties in themselves, combine chemically with Portland cement in the presence

of water to form extra strong cementing material which resists wet cracking, thermal

cracking and has a high degree of cohesion and workability in concrete. PPC has

80% clinker, 15% pozolona and 5% gypsum and accounts for 18% of the total

cement consumption. It is cheaply manufactured because it uses fly ash/burnt

clay/coal waste as the main ingredient. It has a lower heat of hydration, which helps

in preventing cracks where large volumes are being cast.

3.Portland Blast Furnace Slag Cement (PBFSC):

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PBFSC consists of 45% clinker, 50% blast furnace slag and 5% Gypsum and

accounts for 10% of the total cement consumed. It has a heat of hydration even

lower than PPC and is generally used in construction of dams and similar massive

constructions. Portland blast-furnace slag cement contains up to 70 per cent of finely

ground, granulated blastfurnace slag, a nonmetallic product consisting essentially of

Silicates and Aluminum-silicates of Calcium. Slag brings with it the advantage of

the energy invested in the slag making. Grinding slag for cement replacement takes

only 25 per cent of the energy needed to manufacture Portland cement. Using slag

cement to replace a portion of Portland cement in a concrete mixture is a useful

method to make concrete better and more consistent. Portland blast-furnace slag

cement has a lighter colour, better concrete workability, easier finish ability, higher

compressive and flexural strength, lower permeability, improved resistance to

aggressive chemicals and more consistent plastic and hardened consistency.

4. White Cement:

White Portland cement has essentially the same properties as gray cement, except

for color, which is a very important quality control issue in the industry. It is

manufactured using fuel oil (instead of coal) and with iron oxide content below

0.4% to ensure whiteness. Special cooling technique is used. It is used to enhance

aesthetic value, in tiles and for flooring. White cement is much more expensive than

grey cement.

5. Specialized Cement:

9

Oil Well Cement: is made from clinker with special additives to prevent any

porosity.

Rapid Hardening Portland Cement: It is similar to OPC, except that it is

ground much finer, so that on casting, the compressible strength increases

rapidly.

Water Proof Cement: OPC, with small portion of calcium stearate or non-

saponifibale oil to impart waterproofing properties.

CEMENT INDUSTRY

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AN OVERVIEW :

Cement production commenced in India as early as 1914. The first cement unit was

set up at Porbandar in 1914 with a capacity of 1,000 tones per annum.Cement is the

preferred building material in India. It is used extensively in household and

industrial construction. Earlier, government sector used to consume over 50% of the

total cement sold in India, but in the last decade, its share has come down to 35%.

Rural areas consume less than 23% of the total cement. Availability of cheaper

building materials for non-permanent structures affects rural demand.

The cement industry in India has around 300 mini cement plants and 130 large

cement plants. The total production capacity if these plants is around 167.36 million

tons.

Cement industry accounts for the second largest share(the largest being cigarettes)

of the total excise collection by the government. India is the second largest

producer and consumer of cement in the world, after china with a total

capacity of 224 million tones (MT) per annum as on April 30,2010.

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Around 95 per cent of the total cement production is consumed domestically and the

balance is exported. The important end-users for cement include the housing

segment (accounts for around 52 per cent of the total demand), infrastructure

projects and industrial projects excluding road(around 14%) repairs and

maintenance segment (around 18%) and government demand (around 15%) and

demand from roads (around 1%)

CEMENT DEMAND BREAK UP

52%

14%

18%

15%1%

HOUSING SEGMENT

INFRASTRUCTURE

REPAIRS

GOVERNMENT DEMAND

DEMAND FROM ROADS

Cement is a key infrastructure industry. It has been decontrolled from price and

distribution w.e.f. 1st march, 1989 and delicensed on 25th july,1991. However, the

performance of the industry and prices of cement are monitored regularly. Cement

sector has been a beneficiary of government’s infrastructure focus on infrastructure

and housing. Cement has been witnessing a strong growth in the last two year due to

combination of national highway development project(NHDP) and the housing

boom driven by a low interest regime. Over the next 5-6 years the NHDP and the

new project (road component alone) are expected to account for 4-5 million tones of

cement demand every year. This could result in double digit growth in cement sector

over the next five years.

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EXPORT OF CEMENT FROM INDIA

The Indian cement industry exported around 6 million tonnes of cement during

FY2009,accounting for around 4% of the total production. There has been a

significant year to year variation in the export trend, implying that Companies rely

on cement exports to balance out the domestic demand supply situation. The

difference in supply and demand is met by exporting. The export of Indian cement

has increased over the years, giving a boost to the Indian cement industry. The

demand for cement in the foreign countries is a derived demand, for it depends on

industrial activity, real estate, and construction activity. Since growth is taking place

all over the world in these sectors, Indian export of cement is also increasing.

The Indian cement industry is technologically very advanced, as a result of which

the quality of Indian cement is now considered the second best in the world. This

has given a major boost to the Indian export of cement. The production of cement in

India is not only able to meet the domestic demand, but large amounts are also 13

exported. A fair amount of clinker and cement by-products are also exported by

India. As the quality of Indian cement is very good, its demand in the international

market is always high.

The major companies exporting Indian cement are:

Gujarat Ambuja

Ultra Tech Cement

L&T Limited

Export of Indian cement has registered a fair amount of growth, giving a boost to

the Indian economy. India has an immense potential to tap cement markets of

countries in the Middle East and South East Asia due to its strengths of locational

advantage, large-scale limestone and coal deposits, Adequate cement capacity and

world-class cement production with the latest technology.

DOMESTIC PLAYERS

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1. Associated Cement Companies Ltd (ACCL)

Associated Cement Companies Ltd manufactures ordinary Portland cement,

composite cement and special cement and has begun offering its marketing expertise

and distribution facilities to other producers in cement and related areas. It has

twelve manufacturing plants located throughout the country with exports to SAARC

nations. The company plans capital expenditure through expansion of existing units

and/or through acquisitions.

2. Century Textiles and Industries Ltd (CTIL)

The product portfolio of CTIL includes textiles, rayon, cement, pulp & paper,

shipping, property & land development, builders and floriculture. Cement is the

largest division of CTIL and contributes to over 40 per cent of the company's

revenues. The company has an installed capacity of 4.7million tones with a total

cement production of 5.43 million tones in 2009. CTIL has four plants that

manufacture cement, one in Chattisgarh, two in Madhya Pradesh and one in

Maharashtra.

3. Grasim-UltraTech Cemco

Grasim's product profile includes viscose staple fiber (VSF), grey cement, white

cement, sponge iron, chemicals and textiles. With the acquisition of UltraTech,

L&T's cement division in early 2004, Grasim has now become the world's seventh

largest cement producer with a combined capacity of 31 million tones. Grasim (with

UltraTech) held a market share of around 21 per cent in 2005-06. It has plants in

Madhya Pradesh, Chattisgarh, Punjab, Rajasthan, Tamil Nadu and Gujarat among

others. The company plans to invest over US$ 9 million in the next two years to

augment capacity of its cement and fiber business.

4. Gujarat Ambuja Cements Ltd (GACL)

15

Gujarat Ambuja Cements Ltd was set up in 1986 with the commencement of

commercial production at its 2 million tonne plant in Chandrapur, Maharashtra. The

group has clinker manufacturing facilities at Himachal Pradesh, Gujarat,

Maharashtra, Chattisgarh, Punjab and Rajasthan. The company has a market share

of around 10 per cent, with a strong foothold in the northern and western markets.

Its total sales aggregated US$ 526 million with a capacity of 12.6 million tonne in

2009. Gujarat Ambuja is one of India's largest cement exporter and one of the most

cost efficient firms. GACL has a 14.45 per cent stake in ACC, making it the second

largest cement group in the country, after Grasim-UltraTech Cemco.

5. India Cements

India Cements is the largest cement producer in southern India with a total capacity

of 8.81 million tonne and plants in Andhra Pradesh and Tamil Nadu. The company

has a market share of 5.4 per cent with a total cement production of 6.36 million

tonne in 2009. Its product portfolio includes ordinary portland cement and blended

cement. The company has limited its business activity to cement, though it has a

marginal exposure to the shipping business. The company plans to reduce its

manpower significantly and exit non-core businesses to turnaround its fortune.

6. Jaiprakash Associates Limited

Jaiprakash Industries, now known as Jaiprakash Associates Limited (JAL) is part of

the Jaypee Group with businesses in civil engineering, hospitality, cement,

hydropower, design consultancy and IT. It has an annual capacity of 4.6 million

tonne with plants located in Rewa & Bela (Madhya Pradesh) and Sadva Khurd

(Uttar Pradesh). The company has a market share of 3.8 per cent with the cement

division contributing US$ 172 million to revenue in 2009. The company is

upgrading its capacity to 6.5 million tonne through the modernizing of the existing

units and the commissioning of a new grinding unit at Tanda (Uttar Pradesh) with an

investment of US$ 163 million. The company manufactures a wide range of world

16

class cement of OPC grades 33, 43, 53, IRST-40 and special Blends of pozzolana

cement.

7. JK Synthetics

JK Synthetics, a Singhania Group company, started manufacturing nylon at Kota in

1962. Subsequently, it diversified into PSY/PFY, nylon tyre-cord, cement (in 1975),

acrylic and white cement (in 1984). The company has a market share of 2.7 per cent.

JK Synthetics Limited is restructuring its business divisions into two separate

entities- JK Cements and JK Synthetics. After the restructuring, it will be left with a

cement plant at Nimbahera in Rajasthan, with a capacity of 3.26 million metric

tonne and manufacturing white cement.

8. Madras Cements

Madras Cements Ltd is one of the oldest cement companies in the southern region

and is a part of the Armco group. The company is engaged in cement, clinker,

dolomite, dry mortar mix, limestone; ready mix cements (RMC) and units generated

from windmills. The company has three plants in Tamil Nadu, one in Andhra

Pradesh and a mini cement plant in Karnataka. It has a total capacity of 5.47 million

tonne annually and holds a market share of 3.1per cent. Madras Cements plans to

expand by putting up RMC plants. As Karnataka is a promising market, the

company is further expanding its capacity from the present 1.5 million tonne to 3.4

million tonne through an investment of US$ 9 million.

9. ULTRA TECH

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UltraTech Cement Limited has an annual capacity of 23.1 million tonnes. It

manufactures and markets Ordinary Portland Cement, Portland Blast Furnace Slag

Cement and Portland Pozzalana Cement. It also manufactures ready mix concrete

(RMC). UltraTech Cement Limited has five integrated plants, six grinding units and

three terminals — two in India and one in Sri Lanka. UltraTech Cement is the

country’s largest exporter of cement clinker. The export markets span countries

around the Indian Ocean, Africa, Europe and the Middle East.

UltraTech’s subsidiaries are Dakshin Cement Limited and UltraTech Ceylinco (P)

Limited.

Following are some of the major names in the Indian

cement industry:

Company

ProductionInstalled

Capacity

ACC 17,902 18,640

Gujarat Ambuja 15,094 14,860

UltraTech 13,707 17,000

Grasim 14,649 14,115

India Cements 8,434 8,810

JK Group 6,174 6,680

Jaypee Group 6,316 6,531

Century 6,636 6,300

Madras Cements 4,550 5,470

Birla Corp. 5,150 5,113

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FOREIGN PLAYERS :

1. Holcim

Holcim, earlier known as Holder bank, has a cement production capacity of 141.9

million tonne. It is a key player in aggregates, concrete and construction related

services. It has a strong market presence in over 70 countries and is a market leader

in South America and in a number of European and overseas markets. Holcim

entered India by means of a longterm strategic alliance with Gujarat Ambuja

Cements Ltd (GACL). The alliance aims to strengthen their clinker and cement

trading activities in South Asia, the Middle East and the region adjoining the Indian

Ocean. Holcim also intends to use India as an additional base for its IT operations,

R&D projects as well as a procurement sourcing hub to generate additional

synergies and value for the group.

2. Italcementi Group :

The Italecementi group is one of the largest producers and distributors of cement

with 60 cement plants, 547 concrete batching units and 155 quarries spread across

19 countries in Europe, Asia, Africa and North America. Italcementi is present in

the Indian markets through a 50:50 joint venture company with Zuari Cements. All

initiatives in southern India are routed through the joint venture company, while

Italcementi is free to buy deals In its individual capacity in northern India. The joint

venture company has acapacity of 3.4 million tonne and a market share of 2.1 per

cent.

3. Lafarge India :

Lafarge India Pvt Ltd, a subsidiary of the Lafarge Group, has a total cement capacity

of 5 million tonne and a clinker capacity of 3 million tonne in the country. Lafarge

commenced operations in 1999 and currently has a market share of 3.4 per cent. It

exports clinker and cement to Bangladesh and Nepal. It produces Portland slag

19

cement, ordinary portland cement and Portland pozzolana cement. The Indian

cement plants are located in Chhattisgarh and Rajasthan. Lafarge Cement has

become the largest cement selling firm in the Indian markets of West Bengal, Bihar,

Jharkhand and Chhattisgarh.

This project on “Identification and Potential of alternate channel partners for

cement sales” is carried in Ultra Tech Cement, Patiala. As already mentioned that

Ultra Tech Cement is one of the biggest cement producer and player in our country.

And this Ultra tech cement is owned by Aditya Birla Group of Industries. Profile of

Aditya Birla Group of Industries (owner of Ultra tech cement) shall first be

discussed and then on Ultra tech cement prior to relative study and analysis on the

subject.

ADITYA BIRLA GROUP

About the group :

Aditya birla group is the 11th largest producer of cement in the world and 7th

largest in Asia.

Mr. Kumar Mangalam Birla is the Chairman of the group. A US$ 29 billion

corporation, the Aditya Birla Group is in the League of Fortune 500. It is anchored

by an extraordinary force of 130,000 employees, belonging to 30 different

nationalities. In the year 2009, the Group was ranked among the top six great places

for leaders in the Asia-Pacific region, in a study conducted by Hewitt Associates,

RBL Group and Fortune magazine. In India, the Group has been adjudged the best

employer in India and among the top 20 in Asia by the Hewitt-Economic Times and

Wall Street Journal Study 2007.

20

Over 60 per cent of the Group's revenues flow from its overseas operations. The

Group operates in 25 countries India, UK, Germany, Hungary, Brazil, Italy, France,

Luxembourg, Switzerland, Australia, USA, Canada, Egypt, China, Thailand, Laos,

Indonesia, etc.

Globally, the Aditya Birla Group is:-

A metals powerhouse, among the world's most cost-efficient aluminium and

copper producers. Hindalco-Novelis is the largest aluminium rolling

company. It is one of the three biggest producers of primary aluminium in

Asia, with the largest single location copper smelter

No.1 in viscose staple fibre

The fourth-largest producer of insulators

The fourth-largest producer of carbon black

The fifth-largest producer of acrylic fibre

The tenth-largest cement producer

Among the best energy-efficient fertiliser plants

In India:

Largest cement producer

Largest premium, branded apparel company

The second-largest producer of viscose filament yarn

The second-largest in the chlor-alkali sector

Among the top five cellular operators

Among top 10 Indian BPO companies by revenue size

Among the top five asset management and private sector life insurance

companies

Among the top three supermarket chains in the retail business

21

Beyond Business :

Transcending business for over 50 years now, the Group has been and continues to

be involved in meaningful welfare-driven initiatives that distinctly impact the

quality of life of the weaker sections of society in India, South-East Asia and Egypt.

In India, the Group's social projects span 2,500 villages. It reaches out to six million

people annually through the Aditya Birla Centre for Community Initiatives and

Rural Development, spearheaded by Mrs. Rajashree Birla. Its focus is healthcare,

education, sustainable livelihood, infrastructure and espousing social causes.

The Group runs 42 schools, which provide quality education to over 45,000 children

in India's interiors. Of these, 18,000 children receive free education. An additional

8,000 students receive merit scholarships. Likewise at its 18 hospitals in India, more

than 500,000 patients are given extremely subsidised medical care.

VISION MISSION AND VALUES OF GROUP

Vision

To be a premium global conglomerate with a clear focus on each business.

Mission

To deliver superior value to customers, shareholders, employees and society at

large.

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Values

Passion

Seamlessness

Commitment

Integrity

Speed

The major companies of the Group are among India's leading

corporates. These include:

Company Products/services

Grasim Cement, viscose staple fibre, rayon

grade mix grade pulp,, ready mix

concrete, chemicals, textiles.

Ultra Tech Cement ltd Cement, ready mix concrete

Samruddhi Cement Cement

Hindalco Aluminium, copper

Novelis Inc. Aluminium rolled products, cans

primary metal, recycling

Aditya Birla Minerals ltd. Australia-copper mines

Aditya Birla Mhemicals ltd Caustic soda

Hindalco-Almex Aerospace ltd Aerospace alloy

Utkal Alumina International ltd Alumina23

Dahej Harbour& Infrastructure ltd Handling of captive cargo(cargo

unit) and commercial cargo

Aditya Birla Science and

Technology Company ltd.

R&D

Tubed Coals Mines ltd Mining

Mahan Coal ltd Mining

Aditya Birla Nuvo Branded garments, viscose filament

yarn, carbon black, agri business,

insulators, textiles

Birla Sun Life Insurance Company

ltd

Life insurance

Birla Sun Life Asset Management co

ltd

Asset management

Aditya Birla Finance ltd Non-banking financial services

Aditya birla Money Mart ltd Distribution and wealth management

Aditya Birla Money ltd Broking

Birla insurance Advisory &Broking

Services ltd

General insurance advisory and

broking

Aditya Birla Capital Advisors private

ltd.

Private equity investment, advisory

and management services.

Idea Cellular ltd Cellular services

Aditya Birla Minacs World wide ltd IT-ITES

24

Madura Garments life Style retail

company ltd

Branded apparel retail

Peter England Fashions and Retail

ltd

Apparel retail

Essel Mining &Industries ltd Iron ore mining, noble ferro alloys,

and wind power generation

Aditya Birla Retail ltd FMCG products, fruits, vegetables,

groceries, frozen food, bakery.

Homecare and pharmacy.

25

MAIN BRANDS OF THE GROUP

RETAILS:

More

TELECOM:

Idea

TEXTILES:

Linen Club

Pyroguard

Ray One

Nuvo Lana

Jaya Shree

Kolorone

CEMENT

Birla Super

Ultra Tech Cement(formerly Birla Plus)

ALUMINIUM

Everlast Aluminium Roofing Sheets

Freshwrapp Aluminium Foil

Freshpakk Semi-rigid Containers

COPPER

Birla Copper

Birla Gold

Birla Silver

26

GARMENTS

Louis philipppe

Van heusen

Allen solly

Peter England

The collective

CHEMICALS

Polyphos

Epotech

Birlasulf-ss

Birlasulf-sm

Birlasluf-35

27

ULTRA TECH CEMENT: THE ENGINEER’S CHOICE :

Ultra Tech Cement Limited was incorporated as a public limited company on 24th

August 2000, as “L&T Cement Limited” a 100% Subsidiary of Larsen & Toubro

Limited. The name of the Company was changed to Ultra Tech Cement Co. Limited

with effect from 19th November 2003 after the Aditya Birla group owned Grasim

Industries acquired it. The name of the company was again changed to UltraTech

Cement Limited with effect from 11th October 2004.

Ultra Tech Cement Limited is leading cement company and the country’s largest

exporter of cement clinker based in, India. It has an annual capacity of 23.1 million

tonnes. It manufactures and markets Ordinary Portland Cement, Portland Blast

Furnace Slag Cement and Portland Pozzalana Cement. It also manufactures ready

mix concrete (RMC). The export markets span countries around the Indian Ocean,

Africa, Europe and the Middle East. It is part of Grasim Group.

UltraTech Cement Limited has five integrated plants, six grinding units and three

terminals two in India and one in Sri Lanka.

UltraTech’s subsidiaries are Dakshin Cement Limited, UltraTech Cement Lanka

(Pvt.) Ltd. and UltraTech Cement Middle East Investments Limited. With UltraTech

Cement, the Aditya Birla Group has established itself as not only the most respected

domestic player but also among the global leaders in cement

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The stages of evolution of Ultra Tech cement are listed below:-

2001

Grasim acquired 10 per cent stake in L&T. Subsequently increased stake to

15.3 per cent by October 2002

Durgapur grinding unit

2002

The Grasim Board approves an open offer for purchase of up to 20 percent of

the equity shares of Larsen & Toubro Ltd (L&T), in accordance with the

provisions and guidelines issued by the Securities & Exchange Board of India

(SEBI) Regulations, 1997.

Grasim increases its stake in L&T to 14.15 per cent

Arakkonam grinding unit

2003

The board of Larsen & Toubro Ltd (L&T) decides to demerge its cement

business into a separate cement company (CemCo). Grasim decides to acquire

an 8.5 per cent equity stake from L&T and then make an open offer for 30 per

cent of the equity of CemCo, to acquire management control of the company.

2004

Completion of the implementation process to demerge the cement business of

L&T and completion of open offer by Grasim, with the latter acquiring

controlling stake in the newly formed company UltraTech.

2006

Narmada Cement Company Limited amalgamated with Ultra Tech pursuant

to a Scheme of Amalgamation being approved by the Board for Industrial &

Financial Reconstruction (BIFR) in terms of the provision of Sick Industrial

Company Act(Special Provisions).

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ULTRA TECH PRODUCTION UNITS:

Ultra Tech’s subsidiaries are Dakshin Cement Limited and UltraTech Ceylinco (P)

Ltd. UltraTech has five integrated plants, five grinding units and three terminals —

two in India and one in Sri Lanka. These include an integrated plant and two

grinding units of the erstwhile Narmada Cement Company Limited, a subsidiary,

which has been amalgamated with the company in May 2006.The details of its

different production units is shown as under :-

Details of Units:

PLANT/UNIT KILN CAPACITY(tpd) CAPACITIES(million pa)

A. Composite Integrated Plants

1.AndraPradesh Cement Works 8000 2.3

2. Awarpur Cement Works 9500 3.3

3. Gujrat Cement Works 15000 5.3

4.Hirmi Cement Works 8050 1.6

5..Narmada Cement Works 4350 0.4

B. Grinding Units

6. Arakkonam Cement Works 1.2

7. Jharsuguda Cement Works 0.8

8. Narmada Cement (Ratanagiri) 0.4

Works

9. Narmada Cement(Magdala) 0.7

Works

10. West-Bengal Cement Works 1.0

TOTAL 17

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THE ULTRA TECH ADVANTAGE

Ultra Tech Cement Ltd is one of the largest premium quality cement producer in

India. UltraTech Cement is manufactured in the state of the art dry process plant at

Tadipatri (Andhra Pradesh) and grinding unit at Arakkonam (Tamil Nadu).

Advanced instrumentation systems, computerized process control and online quality

control through X-ray ensure consistently high quality product at Ultra Tech Cement

plant.

The quality of Ultra Tech Cement has been globally accepted and is India's largest

exporter of clinker and cement.

Ultra Tech Cement due to its consistently superior quality has become the first

choice amongst discerning users and construction professionals.

Raw Material :

Careful selection and scientific proportioning of raw material with the use of latest

technology enables manufacturing of high quality cement. Rigorous hourly tests are

conducted on raw material. Laboratories at all plants are equipped with sophisticated

facilities.

World Class process Technology ensures Quality and Consistency :

Quality Assurance is an integral part of Ultra Tech’s manufacturing philosophy. The

quality attributes are consistently ensured through rigorous application of advanced

technology. Key features include

31

Use of good quality limestone and careful selection of other raw

Material

Computerized mining operation and homogenization of crushed

limestone

Perfect proportioning of raw materials by QCX

( Quality Control through X-ray )

Online process control through CCR

( Computerized Control Room )

High-quality clinkerisation and close-circuit grinding for optimum particle

size distribution

UltraTech Cement plants have been accredited with ISO 9001, 14001, 18001

Certifications by DNV of Netherlands

Distinct Features:

Higher Compressive strength

Optimal fineness

Balanced physical and chemical properties

Optimal setting time

Consistency in quality

Low-level of Chloride

Advantages:

Higher workability

Lower consumption

Enhanced durability

Quicker construction

Overall economy

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Customer Care and Guidance:

UltraTech Cement offers customers a range of "product plus" services. A full-

fledged Technical Services Network has been set up exclusively for technical advice

and guidance in usage of cement UltraTech Cement is marketed nationwide through

large network of stockist's, sales officers and representatives. Cement dumps have

also been established at strategic locations to facilitate faster delivery of cement

Value Added Services :

Mobile concrete lab services ( Concrete cube testing facilities )

Training Programmes for masons, site supervisors on good

construction practices

Field visits by qualified civil engineers

Educating individual house builders on various aspects of building

material and construction

Non-destructive testing of concrete

Any other customer specific services

Applications :

All Kinds of constructions including precast and prestressed concrete,

masonry works

Slip form constructions

Rehabilitation and retrofitting works

Cement based products such as pipes, tiles, blocks, poles, etc.

Roads, runways, bridges and flyovers

Water retaining structures

ULTRA TECH CEMENT :33

AN OVERVIEW OF EXPORT :

Ultra Tech Cement recently bagged an award for being the highest exporter of the

year from CAPEXIL for the eighth time in a row for its sterling performance. A

leading cement exporter, its plants have also received various awards for

environment protection, social awareness, safety and management of better

industrial relations.

The company has been credited with boosting its exports of cement and clinker last

year by 25 per cent to 4 million tonnes from 2.8 million tonnes in 2008-2009.

stringent quality control and testing in the best laboratories ensure that cement and

clinker produced from its plants conform to and surpass international standards. The

laboratory is equipped to test cement as per ASTM, British and Euro standards. All

the plants are ISO 9001 certified for the latest production process and 14001

certified for environmental management. The cement plant in Gujarat has an

additional OHSAS 18001 certification as well for occupation hazards and safety

parameters. The company has a captive jetty at the Gujarat plant. The jetty length of

337 meters and width of 23 meters is capable of handling ships of 45,000 DWT with

11 meters draft. Loading of cement and clinker onto the ship is carried out by a ship

loader, which is fed by a four km long conveyor belt that connects the plant to the

jetty. Ultra Tech Cement is the first and only Indian cement company to obtain

an EC certification for this plant. The accreditation, given by Bureau Veritas, is a

pre-requisite to supply cement to EC member countries. Ultra Tech is one of the few

Asian cement companies to receive this recognition. The export markets span

countries around the Indian Ocean, Africa, Europe and the Middle East.

34

The Hirmi Cement Works in Chattisgarh and the Jharsuguda Cement Works in

Orissa make them ideal locations for export of cement and clinker to Nepal and

Bangladesh. With captive railway sidings to facilitate loading of railway rakes and a

high-tech production facility for cement and clinker, UltraTech Cement has found

wide acceptance in these neighboring countries

DISCUSSION ON RESEARCH OF PROJECT PROFILE:

35

The project emphasis on Identification of alternate channel partners for cement sales

and then find out their potential for the reasons to switch over to cement sales.

AIM :

The project aims at "Identification of alternate channel partners of cement

sales” and find out potential in them to switch over to cement sales” It revolves

around the alternate partners generally engaged in construction industries who are

the optimal decision maker of their firm's to think /analyse to switch over to cement

sales industries in future. Since the cement is a core product and used by all

consumers; it is very necessary for them to know about their brand's position and

customer expectations.

Earlier Marketers aimed at satisfying the customer's need but the present day of

Marketing requires something more that is customers delight.

In this era of globalization Company can survive only when it knows the fast of

consumer, which is changing day by day. A company can get an edge other its

competitors in these cutthroat competitions through superior quality, innovations

and better customer responsiveness. Hence this project aims to analyze how a other

then cement marketer can be convinced to switch over to cement sales by putting

before them the values of cement sales as compared to their present sales industries.

OBJECTIVE OF THE STUDY:

36

Primary objectives:

To identify the alternate channel partners for cement sales and find out potential in

them to switch over to cement sales with an ultimate aim to increase the sale of

cement (ultra tech)

Secondary objectives:

1. To find out major player in the market having potential to switch over to other

than their present business.(cement).

2. To find out the major competitors of cement sales.

3. To find out the problems faced by alternate partners to switch over to cement

(ultra tech).

4. To help/ suggest the alternate partners to switch over to cement(ultra tech) sales.

5. To suggest the company(ultra tech) to make their policies dealer friendly to

enable the alternate partners to switch over to cement sales(ultra tech).

RESEARCH :

37

a) General Methodology:

The methodology adopted for this project was completely based on primary

information. The locale of the study was Distt. Patiala (Punjab).The first stage

included gathering information about the general alternate partners of cement

market engaged generally in construction industries and others of this city. That

was, to find out which are major players, what is general distribution pattern, what

volume of comparative capital they have invested , turn over, percentage of profit

they are earning. etc.

The second stage comprised determining the objective of the study and drafting the

questionnaire. The questionnaire were designed keeping in mind the objective of the

study. It was designed with due guidance of the Sr. zonal manager of the company.

It was assured that the questionnaire didn’t exceed more than 15 questions. Keeping

in mind the education level of the respondents who were mainly dealers/retailers,

the questionnaire were kept simple and precise.

b) Data Sources:

The research called for gathering primary data only. Hence, primary sources were

considered for the collection of data.

Primary source:

The primary data is gathered for specific purpose and is collected by the researcher

himself. It includes direct communication and feedback from the dealers/sub

dealers/retailers.

c) Research Approach:

38

The research conducted was exploratory in nature and the goal was to gather

preliminary data to shed light on the real nature of the subject and to suggest

possible solutions. For the purpose of this project, I went for a questionnaire- based

survey of dealers/sub-dealers/retailers. A pilot test of this questionnaire was done for

the preparation of final questionnaire. It involved, applying the draft questionnaire

to a sample of 5 dealers.

d)Research Instrument:

1. Personally administered questionnaire

2. Structured interview

3. Personal contacts

The sample size taken for the purpose of study was around 100 respondents(out of

which 40-Sanitation, 15-Paint and Plywood, 8-petrol pump, 15-electricity, 10-

furniture, 12- glassware) from Patiala. All the respondents were chosen randomly.

Sampling Procedure:

I tried to find out most of the dealers trading in construction industries(other than

cement) and few from other than construction industries.

Contact Method:

I personally visited most of the dealers after seeking prior appointment. Few

shopkeepers due to their busy schedule or loyalty for their brand refused to respond

at all.

DISCUSSION ON MARKET SURVEY

39

On market survey it is noted that cement is widely used for construction purposes.

To find out its alternate channel partners, emphasis was given on the dealers/sub-

dealers/retailers engaged in sales of constructions/building materials. Although few

dealers from other than building materials were also consented. Hence, out of more

than 100 dealers/sub-dealers, 40 on Sanitation, 15 Paints & Plywood, 15 electricity,

12 glassware and 10 furniture and 8 petrol pumps were consented.

Market survey was carried out on the questionnaire enclosed as Annexure ‘A’. On

personal visit, most of the dealers discussed the relativity of their present business

based on capital investment, turn-over, space required, handling of material,

pollution and the profit margin.

Most of the dealers shown their un-decisiveness on looking for other than their

present business as they occupied the business from legacy having established

channel of customers. Study also revealed that the new generation having good

status of education had the enthusiasm to look forward for the change. But shown

their constraints on issues like capital constraints, additional space required, labour

problem, pollution problem etc.

ANALYSIS ON DATA COLLECTED :

40

Out of 100 dealers/sub-dealers/retailers visited, 94 has shown their unwillingness to

switch over to cement sales and 4 have shown the willingness to switch over to

cement sales. Remaining 2 had no answers.

0%

20%

40%

60%

80%

100%

94% 4% 2%

unwillingness to switch over to

wllingness to switch over to

no answers

41

Reasons given by the dealers/sub-dealers/retailers shown unwillingness to

switch over to cement sales are elaborated as :-

Capital constraints 15

More space/large godowns required for cement storage 20

Labour problem 15

Cement causes pollution and is harmful to skin.15

Less profit margin 9

Cement gets spoiled when contacted with water. 10

Too much competition in market 10

UNWILLINGNESS OF DEALERS/RETAILERS TO SWITCH OVER TO CEMENT SALES

15

20

1515

9

10

10

CAPITAL CONSTRAINTS

MORE SPACE REQUIRED FORCEMENT STORAGE

LABOUR PROBLEM

CEMENT CAUSES POLLUTIONAND IS HARMFUL TO SKIN

LESS PROFIT MARGIN

TOO MUCH COMPETITION INMARKET

CEMENT GETS SPOILED WHENCONTACTED WITH WATER

Reasons given by the dealers/sub-dealers/retailers willing to switch over to

cement sales :-42

High turn over 1

No advertisement required for Ultra Tech Cement – “The Engineers’ choice –

Name is sufficient” 2

Support of Aditya Birla Group at large 1

WILLINGNESS OF DEALERS/ RETAILERS TO SWITCH OVER TO CEMENT SALES

1

2

1HIGH TURNOVER

NAME IS SUFFICIENT

SUPPORT OF ADITYABIRLA GROUP

CONCLUSION:

43

The study of this subject has enlighten me at large to know widely about the

cement industry in the world and in our country. Aditya Birla Group as a

whole is not only a group of industries and a largest player in the cement

market in the name of Ultra Tech Cement but also playing a vital role in

building up a better society in India by initiating meaningful welfare giving

activities to improve the quality life of weaker sections, its rural development

programme span over 2500 villages run by Mrs. Rajashree Birla is a

incredible job in health care; education and infrastructure etc. It’s running of

schools, hospitals, free education to the children, scholarships to the poor

students is a stone mark in building the better society in India.

Study revealed that there is certainly potential in the market to adopt ultra

tech cement sales, but there is lesser scope in switching over from existing

business(refrence anaylsis of data). Major competitors of cement sales are

from steel, sanitation and other building material.

It has been elaborated by dealers/retailers that for switching over to cement

sales, they had to face, resentment from their elders in family at large. Capital

constraints, requirement of big godowns are some other reasons. And last but

least is the problem of labour and pollution as the cement handling spreads lot

of dust.

Study also revealed that a good number of users are still not aware with the

change in name of Ultra Tech cement. An effort on this account will

positively convince cement dealers to switch over to cement sales.

LIMITATIONS:-

44

The major problem which I faced in my survey was that most of the dealers

being loyal to their family business( adopted from legacy) did not talk about

the problems they are facing.

Data collected on turnover/profit etc to know potential in them may not be

reliable as many of them were not willing to disclose it and others have not

shown the documents.

Many of the dealers /retailers denied to answer any question at all. So the

actual figures can be somewhat different from what that I have found out.

Subject being technical/analytical, some of the dealers/ retailers were not able

to understand. It took me a lot of time to get them understand. Few of them

could not give so much time from their busy schedule to attend customers.

SUGGESTIONS:-

45

I would submit my suggestion to Aditya Birla Group to make their policies

more dealer friendly

Tie up with the bankers to support dealers in getting capital loan limits.

Encouraging awards for achieving prescribed targets.

Daily/weekly based supply chain to avoid holding big godowns.

I have noted that a good number of buyers / users are still unaware of the fact

that Ultra Tech cement is the changed name of Birla cement. Birla cement

had a very good image on the mind of users and it is still very popular. But

people are not much aware about Ultra Tech cement. I would suggest Ultra

Tech to take some more steps to make people familiar with the changed

name. This will surely bring a boost in the sale of Ultra Tech cement and will

convince dealer/retailers to switch over to cement sales.

Ultra Tech cement has very good market image of a modern cement with very

good quality. Company should try to encash their image. Although study

revealed that dealers are least interested to switch over from their present

business, but there is definite potential among younger sections/ freshers to

adopt cement(Ultra Tech) sales. So there is a need for proper attention on this

sector.

Dealers/retailers were suggested on the merits of the cement sales that it has

larger turn over as compared to their present business. They need not to look

on the customer; as Ultra Tech in itself is a name to attract the customer.

They were also convinced that by adopting cement sale (Ultra Tech) they will

be a part of Aditya Birla Group engaged in building a better society in India

ANNEXURE

46

QUESTIONNAIRE

Dear Sir/Madam,

I am conducting a survey on behalf of ultra tech cement as a part of my

‘summer training project.’ I would be extremely benefited if you answer the

following questions. I assure you that the information provided by you will be used

for my project work only.

NAME: _ _ _ _ _ _ _ _

ADDRESS & CONTACT NO. : _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _

_ _ _ _ _ _ _ _ _ _ _ _ _

YOU ARE A:

>DEALER

>RETAILER

>SUB DEALER

Q1. WHAT IS THE NAME OF YOUR FIRM?

ANS.

Q2. WHAT BUSINESS ARE YOU DOING?

ANS.

Q3.DO YOU HAVE SOME OTHER OUTLET IN PATIALA?

47

ANS.(a) YES

(b) NO

Q4.WHAT IS THE TURNOVER AND INVESTMENT OF YOUR FIRM?

ANS.

Q5. HAVE YOU EVER THOUGHT OF CHANGING THE BUSINESS. IF YES

IN WHAT AREA. IS THAT CEMENT?

ANS.

Q6. IF YOU LIKE TO SWITCH OVER TO CEMENT WHICH PRODUCT OF

CEMENT WOULD YOU LIKE?

ANS.(a) ACC (b) ULTRA TECH (c) AMUJA

(d)JAYPEE (e) INDIA (f) OTHERS

Q7. HOW DO YOU COMPARE THE BUSINESS OF CEMENT WITH THAT OF

YOU ARE PRESENTLY DOING IN RESPECT OF

(1) INVESTMENT (2) TURNOVER

ANS.

Q8. WHAT ARE THE HINDRANCES YOU VISUALISE IN CEMENT SALES

AS COMPARED TO THE PRODUCT YOU ARE PRESENTLY SELLING?

ANS.

Q9. WHAT MARGINS/PROFITS DO YOU GET IN YOUR PRESENT

BUSINESS?

ANS.

Q10. WHAT MARGINS/PROFITS DO YOU EXPECT IN CEMENT IN

PERCENTAGE?

48

ANS.

Q11. WHOSE ADVERTISEMENT YOU LIKE THE MOST?

ANS. (a)ACC (b) AMBUJA (c) ULTRA TECH

(d) JAYPEE (e) INDIA (f) OTHERS

Q12. WHAT IS THE BEST REASON YOU THINK IS MORE PREFERRABLE

IN YOUR BUSINESS THEN IN CEMENT MARKET?

ANS.

Q13. DO YOU THINK THAT THERE IS MORE COMPETITION IN CEMENT

MARKET?

ANS.

Q14. HAVE YOU EVER BEEN AWARE ABOUT THE NAME OF ULTRA

TECH CEMENT. IF YES PLEASE TELL THE SOURCE?

ANS.

BIBLIOGRAPHY

49

www.cement.com

www.AdityaBirlaGroup .com

www.UltraTechcement.com

www.researchandmarkets.com

www.cementmanufactureasssociation.com

www.ibef.org

www.wikipedia.com

Research methodology –By Naresh Malhotra

Marketing management-By Philip Kotler

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